The firm’s seventh annual employee benefits survey has found that nearly two-thirds of UK firms say the recruitment of high quality staff remains a challenge.
Origen found that the average employer contribution to defined contribution pension plans is running at 6.7 per cent. For large firms, those with over 500 employees, the maximum contribution payable by employers is almost 50 per cent higher than for SMEs. Origen says this highlights the need to keep their top talent for the overall successful running of these businesses.
Origen’s survey found directors more than twice as likely to be in the few remaining final salary schemes still open. With the Pension Protection Fund currently only promising to cover £31,936.32 of a pension in the event of a defined benefit scheme failing – and even then only if accepted – Origen is recommending board members in schemes that are not fully funded should take advice as to whether continuing to make large pension contributions is the most suitable solution for them to secure their future financial planning.
The survey also found that knowledge of pension reform is scant, at best, particularly in the regions. It found that 60 per cent of companies in the Midlands and East do not know about pensions reform or personal accounts at all.
Of those who were aware of the personal accounts proposals, not one firm surveyed thought they would provide sufficient income for their employees in retirement.
Warren Page, director, client services, Origen, says: “What companies need to realise is that pensions reform will soon become law and become a major financial burden on them, as employers will have to contribute 3 per cent of employees’ salary. It is vital for firms to be on a firm footing with the advent of Pensions Reform and to understand how it will affect their business costs.
“By using specialist adviser firms, companies will be able to keep hold of their key employees through these difficult times and not only survive any recession, but go on to a successful recovery. Using a variety of reward and benefit solutions will enable the spend on employee benefits to be directed to achieve specific goals and ensure the maximum return on investment.”